Major credit card firms and mobile communications providers are joining with banks and tech companies to establish industry-wide standards for mobile payments. Under the auspice of the existing Electronic Transactions Association (ETA), they have formed the Mobile Payments Committee (MPC).

Conspicuously missing from the member list is Square, a younger company already implementing mobile payments with a small credit card reader that attaches to iPhones, iPads, and some Android phones. Square just recently inked a deal to be the new credit- and debit-card processor for coffee chain Starbucks, as Wired reported on August 8. Starbucks also invested $25 million in the three-year-old Square, which is also backed by Visa.

While ETA’s CEO Jason Oxman told VentureBeat that Square would be welcome on the MPC, its absence at the start could be seen as a blow to the group’s legitimacy. As well-meaning as standards groups are, if they fail to incorporate de facto standards already shaping the industry, they can become marginalized.

A History of Side-Stepping

Take Microsoft in the 1990s. In the browser wars between Internet Explorer and Netscape, Microsoft’s IE was dominant. Despite attempts to standardize the webpage programming language HTML by the World Wide Web Consortium (W3C), Microsoft could generally implement any new code it desired because of its overwhelming market share.

It’s only recently that challenges from browsers Firefox and Chrome have leveled the playing field and made it advantageous for Internet Explorer to follow standards. The standards battle is still playing out in office software, with Microsoft’s proprietary document formats often still preferred over standards-based Open Document Format.

Square is not a giant company in a giant market like Microsoft, but a small company that is nevertheless exerting great influence over an emerging industry. The ETA would do well to convince Square to join the MPC so that any adopted standard will truly be used industry-wide.